Ittai Ben-Zeev, CEO of the Tel Aviv Stock Exchange, says today: “We are concluding the second quarter since the coronavirus outbreak and its adverse effects on the local and global economy. The aid extended by governments and central banks overseas and in Israel to stimulate economic activities and support citizens in the shadow of the restrictions that were imposed in many countries due to increasing morbidity rates, stabilized share prices and interest rates on TASE and worldwide. Now more than ever, TASE continues to play a central role in facilitating capital raising by the Government, encouraging companies to resume equity and debt raising on TASE and ensuring economic activity remains as normal as possible. Since the beginning of the year, the increase in trading volumes and liquidity has attracted significant activity from the general public, which we hope will stay on as regular players in the Israeli capital market. Even in these challenging times, TASE is constantly developing new products in order to enrich its mix of products and provide optimal solutions for the varying needs of the capital market.”
The Tel-Aviv Stock Exchange Ltd. (TASE: TASE) today announced its financial results for the second quarter and the first half of the year ended June 30, 2020:
Highlights of the Results:
The revenue in the second quarter of 2020 totaled approximately NIS 73.5 million, compared to approximately NIS 62.9 million in the corresponding quarter last year – a 17% increase. The increase is due mainly to the significant increase in trading volumes on TASE following the coronavirus outbreak in the first quarter. The revenue from trading and clearing recorded a double-digit growth of 24%, which stemmed primarily from the higher share trading volumes alongside an increase in the trading volumes of corporate and government bonds. Substantial growth was also recorded for the other revenue items, including revenue from listing fees, levies and clearing services, increase of 10% compared to the corresponding quarter in 2019. Distribution of data and connectivity services, rose by 26% following the implementation of the information usage model and the initiation of Colocation services and hosting services for trading servers at TASE’s Data Center.
Revenue for the first half of the year amounted to approximately NIS 154.8 million, compared to approximately NIS 127.5 million in the first half of 2019, an increase of 21%. All revenue items increased in the first half of the year, most notably revenue from trading and clearing commissions, which totaled approximately NIS 71.9 million in the period, a 37% increase over the first half of 2019. The increase in other revenue is, among others, the result of investment in the development of new products and services.
It should be noted that the increase in revenue was achieved despite the effect on the revenue of the Company of the fewer trading and clearing days in the second quarter (57 days) compared to the corresponding quarter last year (60 days) – a 5% decrease. In the first six months of 2020 there were 120 trading days, compared to 123 days in the corresponding period last year, a 2.4% decrease.
TASE’s costs, less the effect of share-based payments expenses, amounted to approximately NIS 63.5 million in the second quarter of 2020, an increase of 9.7% compared to approximately NIS 57.9 million in the corresponding quarter last year, which was due mainly to the increase in marketing expenses as a result of the timing of launches of marketing and public campaigns by TASE. Additionally, an 8% increase was recorded in employee benefits expenses as a result of salary updates and variable remuneration that is affected by the increase in the profit for the period. The costs in the first half of 2020 totaled approximately NIS 126.7 million, compared to approximately NIS 119.8 million in the corresponding period last year, an increase of 6% between the periods.
Financing income in the second quarter of 2020 totaled approximately NIS 3.5 million, compared to financing income of approximately NIS 2.3 million in the corresponding period last year.
The adjusted EBITDA in the second quarter of 2020 totaled approximately NIS 21 million, compared to approximately NIS 16.6 million in the corresponding quarter last year, an increase of 26% between the quarters. The increase is due to higher revenue from services, and was partly offset by an increase in costs, primarily marketing costs and employee benefits costs. The adjusted EBITDA in the first half of 2020 totaled approximately NIS 49.9 million, compared to approximately NIS 30.8 million in the corresponding period in 2019, an increase of 62%.
The net profit in the second quarter of 2020 totaled approximately NIS 10 million, compared to approximately NIS 2.5 million in the corresponding quarter last year, an increase of 300% between the quarters. The net profit in the first half of 2020 totaled approximately NIS 20.3 million, compared to approximately NIS 7.9 million in the first half of 2019, an increase of 156% between the periods.
The adjusted net profit in the second quarter of 2020 totaled approximately NIS 10.4 million, compared to approximately NIS 5.5 million in the corresponding quarter last year, an increase of 89% between the quarters. The adjusted net profit in the first half of 2020 totaled approximately NIS 21 million, almost double the profit of approximately NIS 10.9 million in the first half of 2019.
Equity – In the first half of the year, TASE recorded a 3% increase in equity compared to the end of 2019. Total equity amounts to approximately NIS 616.5 million. TASE has surplus equity over regulatory requirements of approximately NIS 292 million.
Liquidity – In the first half of the year, TASE created cash flows of approximately NIS 67.5 million from operating activities and its balances of cash, cash equivalents and financial investments amounted to approximately NIS 343.2 million. TASE has surplus liquidity over regulatory requirements of approximately NIS 144 million.
On April 16, 2020, TASE distributed its first-ever dividend to its shareholders in an amount of NIS 8.77 million. As previously reported, in the third quarter of 2019, TASE closed its offering on the Tel-Aviv Stock Exchange and has operated as a public company since August 1, 2019.
It should also be noted that, on July 16, 2020, TASE announced the cancellation of the labor dispute declared in TASE by the New General Federation of Labor, this in view of the agreements in principle reached between TASE and TASE’s employees committee. Ten days later, a special collective agreement was signed between TASE, on the one hand, and the New General Federation of Labor and TASE’s employees committee, on the other hand, which provides, inter alia, for the distribution of annual bonuses to employees of the Company for the years 2017-2019 and puts an end to said dispute. Considering the provisions that have been included in the financial statements of the Company to date, the special agreement is not expected to have an effect on the financial results of the Company. Nevertheless, a negative cash flow from operating activities may arise in the third quarter of 2020, as a result of the bonus payments to employees.
This notification does not supersede the stated in the periodic financial statements of the Company for the second quarter of 2020, which contain the full and accurate information.
Click here for the link to the complete financial statements for the second quarter of 2020.
Click here for the link to the financial presentation of the second quarter of 2020.
SOURCE The Tel Aviv Stock Exchange Ltd.
https://www.tase.co.il/en
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